LA to End Three-Year Rent Freeze on Controlled Units

Los Angeles has thawed its three-year-old rent freeze on more than 600,000 rent-controlled apartments.

The City Council voted 10-2 to approve a plan to allow up to a 4 percent rent increase, or up to 6 percent if landlords cover the cost of utilities, City News Service reported via the Los Angeles Daily News. The rent hikes can begin Feb. 1.

The move affects 624,000 rent-stabilized units, or 75 percent of the city’s rental apartments. Landlords haven’t been able to raise rents since the dawn of the pandemic in March 2020.

As part of the measure, the council directed the city’s Housing Department to develop programs to help landlords and tenants, as well as for small housing providers to maintain and preserve rent-controlled units.

The council also called for a report on establishing rules to distinguish mom-and-pop from corporate landlords in order to make sure small landlords get the help they need to stay in business.

Council members Paul Krekorian, Curren Price and Katy Yaroslavsky recused themselves because they are landlords. Council members Monica Rodriguez and John Lee voted against the measure.

The vote came before the pandemic-era freeze on rent-controlled units expires on Jan. 31.

The city’s Rent Stabilization Ordinance applies to rental housing built before 1978. It limits the allowable increase for units, tying rent hikes to the consumer price index, a measure of inflation.

In response to the rent hike deadline, Councilman Hugo Soto-Martinez introduced a motion on Oct. 25 that sought to extend the freeze.

The motion was then amended by Councilman Bob Blumenfield during the Housing and Homelessness Committee meeting on Nov. 1.

Blumenfield’s amendment to the ordinance allows rent increases starting in February, with the increases based on the consumer price index from October 2022 through September.

As of September, the CPI rose 3.7 percent over the last 12 months.

By using the most recent guide to inflation, the formula would allow a rent increase of 4 percent, and up to 6 percent, instead of what would have been a 7 percent increase.

It was a compromise, Blumenthal had said, that “no one will like.”

Lee, who voted against the plan, said limiting rent increases would only propel small landlords to sell their properties to large corporate landlords.

Councilwoman Nithya Raman said the conversation is an “important one,” where each council member in their own way wants to protect tenants and rent-controlled units and ensure that mom-and-pop landlords stay in business in Los Angeles.

The Los Angeles County Board of Supervisors last week took similar action, extending but slightly increasing a cap on rent increases allowed for rent-controlled apartments in unincorporated areas.

The board last year imposed a 3 percent cap on rent increases, but that limit was set to expire at the end of the year. The board voted to extend the cap until June 30, 2024, but agreed to increase the allowable rent increase to 4 percent.

— Dana Bartholomew